Unilateral offer

Definition

A unilateral offer is a type of contract where one party makes a promise in exchange for an act by another party, creating an obligation only for the offeror upon performance of that act. This form of agreement is essential to understanding how offers and acceptance work, as it differs from bilateral contracts where both parties make mutual promises. The unilaterality emphasizes that the offer is accepted through the performance of the requested act rather than through a verbal or written agreement.

5 Must Know Facts For Your Next Test

1. In a unilateral offer, the offeror is only bound to perform once the offeree completes the specified act.
2. Classic examples of unilateral offers include reward contracts, where a person promises to pay a reward for finding a lost item.
3. Acceptance of a unilateral offer occurs when the offeree performs the requested act, with no need for communication back to the offeror.
4. A unilateral offer can be revoked before the act is completed, but not once performance has begun.
5. Courts will often enforce unilateral offers as long as they are clear, definite, and communicated effectively to the offeree.

Review Questions

• What distinguishes a unilateral offer from a bilateral contract, and why is this distinction important?
  • The main difference between a unilateral offer and a bilateral contract lies in how acceptance occurs. In a unilateral offer, acceptance happens through the performance of an act rather than through mutual promises. This distinction is crucial because it impacts how legal obligations are formed; only the offeror is bound until the offeree completes the action, while in bilateral contracts, both parties have obligations from the outset.
• Discuss how revocation of a unilateral offer can affect the enforceability of such contracts.
  • Revocation of a unilateral offer can significantly impact its enforceability. If the offeror revokes the offer before the offeree has performed the requested act, then there is no binding contract. However, once the offeree begins to perform the act specified in the offer, revocation typically cannot occur without liability. This means that if someone starts fulfilling their part of a unilateral contract, they can expect that the offeror will honor their promise.
• Evaluate the implications of unilateral offers in modern contractual agreements and provide an example illustrating these implications.
  • Unilateral offers play an important role in modern contractual agreements by allowing flexibility in how parties can engage in transactions. For instance, consider an online contest where a company offers $1,000 to anyone who submits the best video about their product. Here, participants accept the unilateral offer by submitting their videos; until someone does so, the company has no obligation to pay. This illustrates how unilateral offers can foster creativity and encourage participation while also demonstrating that clear terms are necessary for legal enforceability.

Related terms

Bilateral Contract: A contract where both parties make mutual promises to each other, creating obligations for both sides.

Revocation: The act of withdrawing an offer before it has been accepted, which can affect unilateral offers if the act requested has not yet been performed.

Consideration: The value exchanged in a contract, which is essential for both unilateral and bilateral agreements to be legally enforceable.